Caligan urges Anika Therapeutics to conduct strategic review, plans board challenge
21/02/2023 12:00
By Svea Herbst-Bayliss
NEW YORK, Feb 21 (Reuters) - Caligan Partners is urging
Anika Therapeutics ANIK.O to consider strategic alternatives
including a full sale and is preparing to nominate directors to
the biotech company's board, according to a letter to the board
which was seen by Reuters.
Caligan Partners owns a roughly 4% stake in Anika and is
ratcheting up the pressure to protest an underperforming stock
price and losses at the company's joint preservation segment.
"Anika may be better positioned as a private company or as
part of a larger organization," Caligan's managing partner,
David Johnson, wrote to the board.
Anika's osteoarthritis knee pain relief injection treatments
would be attractive to other companies and could be worth almost
$60 per share, Johnson wrote. That would be nearly double
Friday's closing stock price of $30.57.
For the last five months Caligan has tried to engage
constructively with Anika's board to discuss ways to boost the
share price which has dropped 41% over the last five years, the
letter said.
But the two sides have reached an impasse and Johnson wrote
that the directors were unwilling to consider alternatives to
unlock more value for shareholders.
A representative for the company was not immediately
available for comment.
"We believe that in conjunction with a review of Anika's
strategic options, fresh perspectives are needed," the letter
said. "Anika needs new directors on its Board."
Johnson did not identify his director candidates or say how
many he plans to nominate to Anika's seven-person board, where
two members will stand for re-election this year.
Anika is best known for its viscosupplement portfolio,
including Monovisc and Orthovisc, which is marketed by Johnson &
Johnson JNJ.N . The viscosupplement market is expected to grow
strongly in the coming years, boosted by increased demand for
non-surgical treatments.
But Anika's joint preservation segment, which it acquired in
2020, is a drag on profitability, the letter said.
Caligan also expressed concern at management's decision in
March 2022 to withdraw financial targets it had announced less
than a year earlier, a move that caused the stock price to
tumble 14% the following day.
Management also cut its initial guidance every year in the
joint preservation segment since acquiring Arthosurface and
Parcus in 2020, further hurting its credibility with investors,
Johnson wrote.
Caligan, which specializes in health-care investing, last
nominated a slate of directors in September 2019 at AMAG
Pharmaceuticals where it quickly settled for two board seats.
Within a year of the settlement, AMAG had replaced its chief
executive officer, rationalized operating expenses and was
bought by Covis Pharma in late 2020.
(Reporting by Svea Herbst-Bayliss
Editing by Chris Reese)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))